Monday 28th November – 57 Cole Brighton ( Peter Kennett of Hocking Stuart). A family home with some floor plan issues that has been on the market for sometime, has been bought after a few interested parties were gathered together in an Expressions of Interest Campaign and one person popped up over $3,000,000. We rated the home 757/1000 mainly on its position and land characteristics.

Big auction, big crowd and big bidder numbers: 98-100 Mont Albert, Canterbury, Alastair Craig (Jellis Craig), under the hammer, $3,380,000, 6 bidders

End of Spring Market Summary

Bidderman: The stats over the last 3 weeks (below) highlight in our opinion exactly what has been happening to a large extent all year. Two weeks ago we reported 27 bidders on 5 homes and 14 bidders combined on the other 21 auctions. Last week it was the same story – 17 bidders on 4 homes auctioned and only 15 bidders combined on the other 21 homes that we reported on. This week we had 26 bidders on 7 homes and 24 bidders combined on the other 27 homes we reported on. If you are hot, you can be really hot and if you’re not then you need a panadol and a good agent.

Clearance Rates: Basically on auction day you have a 50/50 chance of selling – although demand for $3m+ properties has weakened in last fortnight.

Stales: (long term pass-ins) The market is acting on properties where prices have been adjusted, and continuing to pass over homes where the vendor remains committed to a price rather than a result. One month after Super Saturday a full third of the homes that went to auction still had not been sold. It is not true for agents to say they are all being cleaned up. They are not.

Expressions of Interest – are no different to auctions. At the Top End last month we nominated 8 homes to monitor as having Expressions of Interest closing dates either side of the Melbourne Cup. Of those eight, four (50%) have sold around the proposed closing time and the others remain on the market. The four that have sold were goodies and they got exceptional prices. The other four – well, they remain unattached to a buyer.

The Top 3 things buyers can do to take advantage of what is on offer before Christmas.

1)   Find: Off markets, stales, rebadgers and pass-ins. Many homes are being re-presented after failed campaigns early in the year. If they failed on price then, why pay it now? Off markets are back in season as many recent buyers would be keen to see a quiet sale before Christmas rather than wait till 2012 – there may be a bargain there. Stales – don’t give up. If it’s a home you like then revisit with a  written offer – even if the asking price is baloney. Rule One in this market: if you don’t ask, you don’t get. Man up and put the offer in!

2)  Assess Price: Use past sales carefully and change their meaning – sales of six months ago are now the ceiling prices, not the floor prices (as in previous years). The market is going backwards in price, not forwards (A graders excepted).

3)   Negotiate: As buyers if you want to negotiate to your advantage while still maintaining a reasonable level of risk in terms of buying versus missing out on the home, then you need to be able to apply the Fisherman’s Friend Wet Fish Slap on overpriced homes. You know the commercial – where she gives him an uppercut with a wet fish. If the price is baloney and you are not going to pay it, don’t walk away – you may be doing yourself and the seller a disservice, as you may in fact be the best buyer. Go and hit the seller with the Fisherman’s Friend Wet Fish Slap and then apply pain relief afterwards. This is exactly what our selling agent friends have been doing for years in post auction negotiations. They hit you hard with a big number, then they offer to relieve your pain (slightly). So if you have a sensible price, go and offer it – you may well be the seller’s best deal and if you walk away because of your timidity, then both you and the seller lose. If aFisherman’s Friend Wet Fish Slap is not your caper consider hiring a professional who can help you – it’s invigorating. And of course if it doesn’t have the desired effect – consider moving on.

Saturday 26th November Weekend Auction Results

Bought

• 98-100 Mont Albert Road Canterbury (Alastair Craig) – $3,380,000 – 6 bidders
• 25 Grange Road Kew (James Tostevin) – Around $3,000,000 – 1 bidder
• 24 Anderson Malvern East (Heather Elder) – Around $3,000,000 – 2 bidders

Passed-In

• 2 Collins St Brighton – $2,975,000 – 0 bidders
• 1022 Malvern Road Armadale – $2,800,000 – 0 bidders
• 21 Wattle Road Hawthorn – $3,050,000 – 0 bidders
• 68 Molesworth Kew – $4,600,000  – 0 bidders
• 20 McGregor Middle Park – $3,200,000 – 0 bidders

Friday 25th November – 58 Howitt Road, Caulfield North has been bought for a record Caulfield price according to the effervescent Ross Savas of Kay and Burton. The price;  well can say they were talking $6 million and the calibre of the home leads us to conclude they would have got that, so over is definitely not out of the question. This was a truly great home, our James Home Rating of 838/1000 is one of the highest we have scored this year. The market is obviously still recognising and paying for great quality.

Thursday 24th November – 25 Montalto Avenue Toorak ( Nicole Gleeson) – Basically land only for the area as the home requires a serious reno – passed-in last Saturday on a lone vendor bid of $3,450,000 was bought today for an undisclosed amount.

Wednesday 23rd November – 58 Glyndon Rd, Camberwell (Jock Langley) Private Auction  BOUGHT over $3,300,000: Attended this mid week private auction  just in case a bargain was to be had. No bargain, with a very healthy Tim Derham – Abercromby’s auction – 3 bidders and passed in for $3,300,000 and bit – deal was negotiated after wards in excess of that figure. Strong result – this is still outer Camberwell!
PROPERTY: James Home Rating Excerpt: Big home in the “almost ‘burbs” on 2100 sqm with tennis court – it’s all about the land. Set down for a private auction as opposed to a public one – (mmmmm, that’s an interesting twist) on November 23rd. What is the land per sqm at this size worth? How many other competitors do I really have in this market? Am I better to go before and if not successful how will I manage a Jock Langley pass-in?

Monday 21st November – 6-8 Myrtle St Brighton (Barb Gregory). This last weekend’s biggest auction – and another private one at that, was completed at a price over the quote of $6,000,000. So another solid Golden Mile sale with land in excess of 1600 sqm plus some solid improvements and another good result for Marshall White in Brighton. While private auctions are very secretive they seem to meet the vendors requirements for privacy and a buyers liking for transparency – perhaps a way of the future for some key homes.

Subdued mood: Toorak, 25 Montalto Ave, Jason Scillio (Kay & Burton), passed-in $3,450,000, no bidders

Saturday 19th November: At auction only two out of ten were reported as sold at the $3m+ level.

• 19 Florence St, Kew (Diana Healy) – Bought for over $3,600,000
• 2 Monomeath Pl, Canterbury ( Richard Earle) – Bought after for over $3,100,000

Pass-Ins at

• 47 York St, Kilda West – $3,800,000
• 24 Monaro Rd, Kooyong – $3,500,000
• 25 Montalto Ave, Toorak – $3,450,000
• 9 Berry St, East Melbourne – $3,200,000
• 11 Victor Ave, Kew – $3,000,000
• 2 Snooks Crt, Brighton – $3,000,000
• 26 Stawell St, Kew – $2,950,000
• 6-8 Myrtle St Brighton – undisclosed

Overall quite a weak day – although having been through many of those pass-ins I can say that a number were not the most exciting of offerings.

Friday 18th November: The Christmas Stock Flood has really gained some momentum in the last week with a large influx of homes coming onto the market right now – especially at the Top End (look at our stock graphs in Market News). This has to be good for buyers. Where in recent times our main role has been finding quality homes – the bulk or our work has moved to assessment and negotiation. Price is such a movable beast right now and it’s good, as a buyer, to have an open mind and strategies (within your acceptable risk v reward parameters) to take advantage of the lay of the land. Please that is not to say that all the goodies are being given away – far from it – but once a home falls into that certain category (eg stale, overpriced or a B grader) then significant discounts are possible – if the vendor wants to sell. Yes you need to know what to do, how to do it and when to do it – but professional advice can fill that knowledge gap for you. Two properties purchased in the last fortnight or so $700,000+ off the original asking price and that was a $3m home and $300,000+ off the original asking price and that was a $2,000,000 home. The market is operating normally – however now, more so than at any other time this year, it is a true buyers’ market – Great Choice and Negotiable Prices. Buy Well.

Wednesday 15th November: 4 Kiers Court Caulfield North (Phillip French)  one of the more distinctive homes I have seen this year is now reported as sold in excess of $3,000,000. Our James Home Rating was 684/1000 (see below) and what the owners did with a difficult block was in my opinion, amazing and the price was solid. Also a huge block at 181 Gipps St East Melbourne (Sarah Case) over 1000 sqm was bought undisclosed (over $5,000,000) and finally to complete the RT Edgar trifecta 29 Loch St, St Kilda West (Anthony Grimwade) almost 1000 sqm plus period home was bought for $3,800,000.

Tuesday 14th November: 3/61 Nepean Highway Aspendale (Rowan Thompson) which we reported as passed-in on the weekend, has now been bought for $3,150,000.

TOORAK 49 Mathoura Road, Justin Long, 4 Bidders, $5,220,000

Saturday 12th November: 3 biggies – 2 bought and 1 passed in.

47 Kinkora Rd, Hawthorn, Peter Batrouney (Jellis Craig); Under the hammer, $5,660,000, 4 bidders
Grace Park, north-facing rear, big land and beautiful period home. Some may say a drover’s dog could sell this on a sunny day, but that would be unfair on Peter Batrouney and Campbell Ward. This writer knows for sure we will get a first rate performance and in all likelihood a very solid result. About 120 have gathered in the back yard and we begin with a vendor bid of $5,000,000. Quickly in $50,000s between Bidder 1 and Bidder 2 we reach $5,300,000 and a half time break. Two more bidders join in and it’s on the market at $5,500,000. A few more bids and it’s all over at $5,660,000. A typical successful Peter Batrouney and Campbell Ward / Grace Park auction.

49 Mathoura Road Toorak, Justin Long: Under the hammer, $5,220,000, 5 bidders
Justin Long is a very experienced and capable auctioneer and he needed to be today as he was put under pressure by bidders constantly trying to reduce the bids he was calling for. He held firm time and time again, and in the end the vendors would have to think (whether they were happy with the price or not) that without Justin’s skill and endeavours, this property might not have been sold this weekend. Five bidders all with their own individual strategies locked horns for 45 minutes involving breaks and multiple “is it on the market?” questions. The opening bid was $4,000,000, the property declared on the market at $4,950,000 and eventually bought under the hammer for $5,220,000.

Biggest Pass In: 3/61 Nepean Hwy, Aspendale, Rowan Thompson (RT Edgar); Passed in $3,000,000, 1 bidder
The excitement was in the air and the house was buzzing with people enjoying the sunshine and the stunning panoramic view of the beach literally on the doorstep.  With only 500 beach front homes in Melbourne, explained auctioneer Rowan Thompson to the large crowd of 100, the “international standard resort style property” represented  a wonderful opportunity.  Mr Thompson opened proceedings with a vendor bid of $2,800,000 and sought $100,000 rises.  With Mr Thompson’s encouragement, a bidder from the crowd obliged with a bid of $2,900,000.  A vendor bid of $3,000,000 followed and despite Mr Thomson’s best efforts, there was no further bidding on the day and the property was passed in on the vendor bid.

Friday 11th November: This is a typical week at the Top End for me. I have been through the following homes, given them a James Home Ratings (not for public display), calculated buyer value and price ranges and noted a few negotiation strategy issues each home may present when attempting to maximise buyer outcomes:

PRICE: $3,000,000+ (Agent Quote)
POSITION: 7 Linacre Road, Hampton, (Jenny Dwyer)
PROPERTY: James Home Rating Excerpt: Complex family home with water views (quality ones of Yacht Club), multiple living areas, 5 bedrooms on one level, dual staircases, basement and all on 635 sqm in one of Melbourne best inner seaside precincts. Price – that will be interesting as will the method of sale – both rare birds for this part of the world right now.

PRICE: $5,250,000 (Asking Price)
POSITION: 29 Seymour Grove, Brighton (Ian Jackson)
PROPERTY: James Home Rating Excerpt: North-facing rear, brand-new build on a big block around 1,000 sqm. Upstairs is very good, perhaps a lift was needed at this price. It’s to a formula and one that always sells when buyer meets seller or vice versa on price – that meeting price – well that is the big question? I remember going to the land auction around the start of the GFC (early 2008) and it was bought quite well at $2,100 per sqm – bought quiet well, considering what other knockdowns in this street and Wolseley had gone for, a short time before this auction.

PRICE: $8,000,000 ish (Agent Quote)
POSITION: 18 Fitzroy St, Kilda (Michael Gibson)
PROPERTY: James Home Rating Excerpt: Has already received a lot of publicity due to its current owner and the facade photograph is wonderfully enticing. A home of pluses and minuses for different family types. One of the real pluses for some families would be the rooftop pool – spectacular is an understatement. Location is also smack bang in the middle of the action. Building was an advertising agency office in a previous life – although much of the work was already done when this last sold (twice in 2004 between $3,000,000 and $4,000,000) .

PRICE: $6,500,000 plus (Agent Quote)
POSITION: 21 Isabella Grove, Hawthorn (Scott Patterson)
PROPERTY: James Home Rating Excerpt: It’s a trip back in time. The entrance really looks like a movie set from Charles Dickens (love the dome). One of the most powerful views for me was actually through the kitchen window of what would have been servant’s quarters – the form the steps take going back up across the road stick in my mind. The home itself is obviously one for specific tastes and you will have a few issues to get your head around if you are going to be the buyer – but that could be well worth the mental effort.

PRICE: Circle $10m to $12m (Agent Quote)
POSITION: 1 Harcourt St, Hawthorn East (James Tostevin)
PROPERTY: James Home Rating Excerpt: Most “in the trade” would describe this as a big thumper and the agent quote estimate says you are going to need a big wallet to match. Valuing this would require an open mind and purchasing well, would require a firm base on goals and a flexible strategy to test on many levels. The house – well – it’s not about the house, there are bones to work with. No, in my opinion it is all about is the land and more to the point the shape of the land and where the home sits and what you want and can do within its limitations. So is the land worth the $sqm of  say no 49 Harcourt which had two bidders at auction and went for over $7,200,000 last year or is there a discount involved? Challenges for all parties if this is to be a deal.

PRICE: In the picture you can see next door which was also subject to a similar campaign recently at a similar asking price tag ($20,000,000 to $30,000,000). The price –  if it does indeed sell – will be a source of conjecture, supposition and innuendo for months to come just like Shakespeare Grove was last year and just like when this home was so famously bought and sold last time (a decade ag0).
POSITION: 1 Towers Rd, Toorak (Michael Gibson)
PROPERTY: James Home Rating Excerpt: Wow – if you can work out a way to get through this home you should. An art deco masterpiece with pool, tennis court, contemplative gardens all on a Toorak acre. The entrance and view from the kitchen are very powerful. At this price level, there are many more questions, but it always comes back to one final one, when the others have been answered – How can I buy this for the best possible price? Your answer may well be determined by the relationships you keep.

PRICE: Around $3million is Agent Jock’s quote
POSITION: 58 Glyndon Rd, Camberwell (Jock Langley)
PROPERTY: James Home Rating Excerpt: Big home in the “almost ‘burbs” on 2100 sqm with tennis court – it’s all about the land. Set down for a private auction as opposed to a public one – (mmmmm, that’s an interesting twist) on November 23rd. What is the land per sqm at this size worth? How many other competitors do I really have in this market? Am I better to go before and if not successful how will I manage a Jock Langley pass-in?

PRICE: Around $4,500,000 (Agent Quote)
POSITION: 68 Molesworth St, Kew (Hamish Tostevin)
PROPERTY: James Home Rating Excerpt: This is a home of thought and quality – and with a price tag quoted over $4.5m if you are going to be the buyer you are going to have to put some thought and quality into how to go about this – such as, what is this home really worth? It is a very specific home – big in size, lifts, views, a lot of WOW. Attention to detail is obvious. But what about heating and cooling and sun with all that glass. Land value is not hard but home value – is this a $1.5m or a $2.5m build and will that matter? One of those buys where process is so very important if you want to buy well. A rare offering for the modern home buyer and worthy of serious consideration.

Grand Sale Land Sale in Kew - Tender Closing Today (Friday 11th November). It will be interesting to see what happens at 6-12 Madden Grove Kew on this mini-subdivision of 4 blocks around 600 sqm each. Mark Dayman and Antony Woodley taking in the offers and have expectations above $2,000 per square metre.

Thursday 10th November: Another three strongish Toorak buys in the last week.

• 16 Kenley Court Toorak (Michael Gibson of Kay and Burton) – Bought for over $12 million for nearly 2000 sqm of land a very substantial home. James Home Rating 779/1000. Excerpt from James Home Rating:

The big pluses for me are the court location, the look from the street and the gardens – tranquil, serene, sanctuary – all those words that are antonyms to stress. This is what the gardens are, and for me they are the major selling point to 16 Kenley. The home, well for most of us (i.e. those who can’t afford it) it’s a rare and magnificent home. However for buyers at this level I think they will find some issues with the floorplan – especially the position and connection between the kitchen and living area  and the front staircase so close to the front door. This seems an afterthought and does detract a little from the majesty of the entrance. Walking through the home I keep thinking of the gardens, the location and the land size more so than the building. However if you can afford 16 Kenley then you can afford to make the changes you want. And so, like almost offerings at this level in Toorak, it comes back to: when do you want to buy, what is available, what is the right exchange price and how best do you go about the process?

• 24-26 Balmerino Ave, Toorak (Justin Long of Marshall White and Hugh Hardy of Bennison Mackinnon) – 1850 sqm of land inc tennis court. Passed in at the Thursday afternoon auction for $7,000,000 and was bought immediately afterwards for an undisclosed amount. As I went through this home it felt mostly about the land and the sweeping views, however I suppose that is the way with almost all Toorak homes. The end result was $3,800 per sqm approx.
• 4 Lisbuoy Court Toorak (Nicole Gleeson and Michael Gibson) – Townhouse with some land, bought for over $4,000,000.

Greg Costello and Tim Wilson in full swing on the Brighton Golden Mile - continuing to sell at $10,000 per sqm. See report below

Week Ending November 5th: Has the action returned after the September excitement was followed by an early October siesta? We think yes – it is back. People do have cash and they are parting with it when they find the right home. In the last 10 days at least 9 homes over $4 million have been bought and sold.

Some Auction Results this weekend

• Biggest Sale: 2 Mytton Grove, Brighton, Greg Costello (RT Edgar); Under the hammer $6,050,000, 2 bidders
  Brighton Golden Mile Beachfront – these are four words that mean money. In recent times that has meant $8000 to $10,000 per sqm – at least at the northern end. A question our auctioneer Greg Costello asked in his opening spiel was “is this southern part of the Golden Mile more highly regarded than the northern part due to the activity on the beachfront?” Personally, as I run past here every day I think yes, but the auction result will tell us for sure. With the blue sea as our backdrop I’m expecting an exciting auction – irrespective of the market this stuff always sells. Greg Costello is conducting proceedings in front of a small crowd of 30. We start with an opening bid of $4,850,000 from Bidder one. $5,000,000 comes in from Bidder two strongly – solid bid. $5,100,000 from a third bidder – who as it turns out was with Bidder one – so we don’t count him – strange strategy that one. Anyway with a fair bit of action we move up to $5,600,000 in various amounts and then to $5,750,000. At all times Bidder two looks in control and is bidding very well and with some intimidation without being over the top. Normally Greg Costello is in excellent form but today was not his best day with bid retention and there are a number of confusing referrals back to his penciller for clarification. At $5,900,000 the “is it on the market?” question was asked, and after a quick referral, an affirmative answer is returned. There are two more decisive bids from Bidder two and its all his at $6,050,000. Loved the winning bidder’s style – aggressive and sensible and much better than his opponent and also many so called professionals that I have witnessed recently – well done sir – we have a job for you here if you care to apply. (Mal James)

• Other Brighton Golden Mile Results: 2 Mytton at $6,050,000 divided by 613 sqm = $9,869 per sqm or almost identical for previous absolute beachfront sqm rates over the past year (which have maintained themselves in the last year and increased on previous high water marks). 8 Moule Avenue (David Hart) is a classic Golden Mile address (but not absolute beachfront) and sold this weekend for $2,310,000 or $3,510 per metre. On first glance that is not expensive, but it is in fact not too far off previous Golden Mile sqm rates. A third Golden Mile property 15 Dudley St (Regina and Brian) sold for in excess of its pass-in figure at $4,400,000 which, again considering the house was nothing other than a nice facade, was a very, very solid result.
• Biggest Pass In: 58 Kooyongkoot Rd, Hawthorn, Scott Patterson (Kay & Burton); passed in, $3,400,000, no bidders
  Could you find a better setting for a Melbourne Spring auction? A tranquil backyard by the pool! In front of around 60 people, auctioneer Scott Patterson gave his usual professional best to attract some crowd bidding but this was to no avail. The property passed in after two vendor bids – $3,300,000 and $3,400,000 respectively – and remains for private sale. (Adam Woledge)
• Bidderbuzz Auction: 15 Chastleton Ave, Toorak, Warwick Anderson (RT Edgar); Under the hammer, $4,135,000, 4 bidders
  Spirited bidding after a slow start was a welcome sequence at the auction of this single level home in Toorak. A crowd of 80 neighbours chatted quietly throughout the action, eagerly anticipating the value to be determined by the market. After opening on a vendor bid of $3,400,000 and the declaration that the council had valued the property at $3,700,000, auctioneer Warwick Anderson tried to keep pace with the determined 4 bidders. After the second vendor referral, Warwick announced the property on the market at $3,800,000 but the strong bidding continued, with bidder number 4 securing the home at $4,135,000. (Gina Kantzas)

RT Edgar: Has had a pretty solid time with 8 properties selling over $2 million in less than a week, including an off market at 68 Walsh St believed to be around $4 million, not mentioned in above dispatches.

October 29th: Excerpt from October 15th James Marketnews: Want a home with a Tennis Court in Toorak? Got around $6 million dollars? In the last week we visited, assessed and rated: 11 Scotsburn Toorak (Andrew Smith), 10 Montalto Toorak (Mike Gibson) and 25 Scott Glen Iris (Rae Tomlinson). All have tennis courts.

The Question: After Super Saturday would these 3 not sell, sell lower or would the Mexican Wave** (see explanation below) kick in and they all sell once one had gone.
The Answer: The Jungle Drums beat loudly and the Mexican Wave kicked in with all three selling within 24 hours of each other. All three had quotes of $5m to $6m during their campaigns. Scotsburn was bought after a weekend pass-in (believed to be around $5m), Montalto was for most of its campaign a private sale (but finished in a Boardroom Auction at just over $7m) and Scott Grove was an Expressions of Interest closing Wednesday (reportedly 3 interested parties and sold 2 hours after the deadline for well over $6m).

October 29th: 54 Hanby St Brighton (above) (Kevin O’Brien) – The only auction I came out for today. Damian Davis – a bit out of his normal territory started up the engines with a solid opening spiel in front of a crowd of around 50. After he had finished his coverage on the home’s flow, light and feel, he asked for $3,300,000 from the crowd. Nothing was forthcoming, so a vendor bid at $3,300,000. Another vendor bid at $3,350,000 and a half time break did nothing to excite and so the words pass in brought an end to the proceedings on this lovely home that has a vendor at one level and potential buyers seemingly at another.

October 25th: 25 Scott Grove Glen Iris (Rae Tomlinson and James Connell): Bought within 2 hours of close of play for well in excess of the $6m+ price tag. This was a very good home on a very big parcel of land and the result was deserved and expected for a quality A grader – we rated it at almost 3 hats or 791/1000 (see our rating below). And a good night for Marshall White overall with 34 Chatsworth Prahran being sold through Madeleine Kennedy for $3,137,000.

October 24th: The collection of Expressions of Interest campaigns finishing in late October/Early November will be watched by many. There are some great homes, but the results this last weekend indicate they may not sell as strongly as September results suggested they might. We are monitoring a geographically widespread sample – all over $3m and will bring you the results as they come. Lets see if the K&B Mexican Wave** is in play for the Top End buyers or have taken their bat and ball and gone home.

**K&B’s Mexican Wave: It is possible that the above marketing campaigns could in fact produce higher results if we see more marketing campaigns in the style of Kay and Burton’s Mexican Wave effect. It’s just like at the MCG: Kay and Burton brings a group of homes together and push and prod till they get one buyer to perform and then uses that result to get other buyers to put their hands up on other homes. This is planned months beforehand, it’s totally legitimate, it’s brilliant in concept and it’s why people like Ross Savas and Mike Gibson are worth their fees and then some. Other Mexican Wave agents who plan and execute well are Marcus Chiminello, Rae Tomlinson, Heather Elder, Justin Long and Peter Bennison of Marshall White to name a few. However K&B are the absolute masters at the Mexican Wave.

Alastair Craig and Richard Winneke maneuver 3 bidders to a bought price of $2,855,000. This is where some of last spring's $3M plus action is right now at $3M minus.

October 22nd: During 2011 the $3M+ market has been as fickle as we can remember: it disappeared for most of the year, came back with a vengeance in September and has now seemingly run away lost again.
To demonstrate the point, only two homes out of 150+ scheduled $M+ auctions reported a sale price over $3 million today.  Yes two – that’s not many.

They were 34 Stevenson St, Kew with James Tostevin, which sold after auction and 7 Barrington Ave, also in Kew, with Scott Patterson, which sold before auction.

Mid- Week Apartment Auction: 3002/368 St Kilda Road (Marcus Chiminello) – Thursday night auction @ 7.00 pm. A similar property in the same building on the same side, same square metres, same décor, sold for $3.3m a short time ago. Quoting $3.3m plus then $3.5m plus. Surprising to have an auction in St Kilda Road but Marcus Chiminello and Nicole French (the new Batman and Robin) lined up auctioneer Growling Jack Bongiorno and 3 bidders fought it out past the last sale sales, past the first quote and the last quote and all the way up to $3,800,000.

Why did it sell so well? Demand exceeding Supply for North orientation; 315 sqm size with car parking on the 1st floor (no dizziness getting in and getting out) and Shrine views. Well marketed by one of the best in the business at this stuff.

Price: Has been gently improving in some key blocks on some key apartments – but it’s all about the apartment characteristics. There are literally hundreds of apartments above a million that have no buyers at all, because they have nothing unique to offer except a very cheap price.

Biggest Sale: 38 Kerferd St, Malvern East, Glen Coutinho (Hocking Stuart); Under hammer, $2,862,000, 4 bidders
Wow what an auction! This is as intense as it gets. Glen Coutinho has firmed as one of the best auctioneers in Melbourne in my humble opinion. What started out with meek interest from a lively crowd of around 70 people turned into the most hotly contested auction I’ve ever seen. A modest opening bid of $2,350,000 was announced from one party in the crowd and was quickly overtaken by another for $2,355,000.  The two went back and forth in increments of $5,000, then $2,000, then $10,000. Once the price reached $2,501,000 it seemed as though the action had come to a head, and Mr Coutinho retreated to his vendors to discuss the situation. Confident of reaching the price he and his vendors desired, Mr Coutinho continued unabated, knowing full well there were several other parties very interested in the property. As the property was being called down for a fourth time a third party entered the fray, bidding $2,540,000. This guy was ready for a showdown, but the original bidder stuck to it and was relentless in his pursuit of the Glen Iris home. Unable to continue, the young lion who made a worthy challenge correctly backed off, leaving the fight wounded but not insulted. At this point the crowd was able to breathe momentarily, but it wasn’t over! A fourth man entered the mix, and began his challenge. He proceeded to walk across the road towards the original bidder attempting to eye him down, but the original bidder was having none of it. As those who play enough poker know, when someone shows aggression towards you, it is generally a sign of weakness. Fortunately, the original bidder (who probably doesn’t play poker) picked up on the bluff and showed no signs of folding. Once the figure reached $2,862,000, the new combatant gave up announcing: ‘he can have it,’ and the auction ended with a standing ovation from the crowd, although it may have only been an ovation as they were already standing. (Daniel Ehrenreich)

Biggest Pass In: 11 Scotsburn Grove, Toorak, Jeremy Fox (RT Edgar); Passed in, $5,000,000, 1 bidder
A small crowd of around 40 and half are Toorak agents just looking. Jeremy Fox gives us a good solid spiel and we are away. Or are we? Jeremy calls for a $5,000,000 opening bid and gets nothing but silence. He goes inside for his half time break and leaves us all in the rain – actually he was pretty quick to return. I’m typing in Passed in on my Ipad and – whoops no – there was a genuine bid and $5,000,000 is taken up. Then it is passed in to the lone bidder. We await the outcome. (Mal James)

October 15th: Quality Stock Levels have improved for Buyers:
Good levels of good stock came into the market late September and buyers began to take deeper breaths and relax a little.  Angst dissipated somewhat as quality buyer saw more quality homes they could buy, diminishing the spectre of missing out on a home, leading to a drop in buyer urgency and ultimately price.

This Quality Supply Increase is best demonstrated at the Top End.

Want a home with a Tennis Court in Toorak? Got around $6 million dollars?

In the last week we visited, assessed and rated: 11 Scotsburn Toorak (Andrew Smith), 10 Montalto Toorak (Mike Gibson) and 25 Scott Glen Iris (Rae Tomlinson). All have tennis courts. So even if there are 10 buyers for tennis courts at this price level, there’s a fair bit a choice there. If normal market forces prevail and the buyers have good representation, then the prices on all three could be lower than if there was only one of these homes on offer. That’s unless, of course, one home is more strongly favoured than the others by a significant number of those 10 buyers – or if the Mexican Wave effect happens (see below).

Similarly in the last week we have been through some really good new home offerings at over $6 million, including 14 Kilsyth Toorak (Michael Armstrong); 15 Vista Toorak (Nicole Gleeson) and 33 Coppin Grove Hawthorn ( Scott Patterson) – see our ratings over the coming week.

These are just some examples. And in fact, quality stock levels have improved at all price levels. This is good news for Top End buyers and the reason we think October 2011 and hopefully November 2011 will be better months for buyers than were Winter 2011 and September 2011 in terms of:

1. More choice

2. Less chance of the runaway prices.

This price segment is all about either side of the Melbourne Cup – as a number of Expressions of Interest, Private Sale and Auction campaigns are scheduled for some sort of conclusion at that time. We anticipate publicly reporting in  early November as to market movements since September’s price and activity spiking.

Recently we gave a talk to more than a hundred high net worth individuals at the Sandringham Yacht Club for Peter Wilson of Godfrey Pembroke where we involved the participants in a hands-on exercise that introduced them to “valuing” high end homes.

There were three steps to the process. First we asked them to give their valuation of three 250sqm beachfront blocks in Sandringham that were up for sale. Then we informed them there was a conservative valuation of $5,400,000 from a reputable valuer, and asked them to revalue the blocks in the light of this information. Then, after telling them the asking price was $8,000,000 and there was possibly a winning consortium’s bid, we asked them to give a third and final valuation. Their final valuation had to be above the possible winning consortium’s bid – after all there is no point coming second if you want to buy something.

Three clear things came out of this exercise:

1. At the Top End people have a very wide opinion of values: In this exercise the estimates varied from $3,000,000 to $12,000,000 on the same offering. People were genuinely trying to estimate correctly – there was self interest involved.
2. The Power of Suggestion: While the value range remained wide for the second lot of “valuations” after the $5,400,000 value was tabled, not one participant’s valuation was now below $5,400,000. Once a credible suggestion had been given, it seems everyone put a floor under the price. Very interesting if you are the only taker on a home.
3. The Power of Step Quoting: Scenario Three produced a wide range of valuations but NOT ONE was below the valuation the respective participant had put in Scenario Two. In other words, for every one of the participants the price had gone up. This is again about the power of suggestion and the power of Step Quoting.

For buyers who believe that an asking price is an asking price and a valuation is a valuation – like rocks set in stone on which to build a platform of action – this scenario may seem a bit perplexing.

But the fact is that when you’re buying a property – especially at the Top End – opinions, suggestions and questioning are how a final sell price is established.

When agents are dealing with buyers – including us as buyers agents – they use suggestion firstly to frame an area of thought e.g. a price range and then to move you the buyer up the price ladder. Depending on the agent’s credibility you will either go with that suggestion or you won’t.

Agents also use questioning to work out if you are actually on the price ladder – and if so at what position. They do this to ascertain broad interest which they report back to the vendor, and to ascertain your interest so as they can decide on a plan to take you up to the next rung.

As buyer agents our role is to do the reverse.  Our job is not to establish a credible floor, but to establish a credible ceiling. We use the power of suggestion to indicate to the selling agent where a client may be on the price ladder. We use questioning to gain information and to see if those suggestions have been effective.

Remember that in home buying there are three opinions that really count when it comes to forming or framing your price thoughts. Firstly: the vendor’s sell price (not their asking price). Secondly: the highest other bidder’s buy price. (That is the only other buyer competition we are concerned about). And thirdly: your own thoughts on price. Which is actually the most important opinion on price.  Not the valuer, not the buying agent and not the selling agent, not Uncle Jim’s – but yours. If it is informed and considered then it is correct and more important than all others.

Some of you may view this all as a game and some may not want to be involved. But here in Melbourne, it’s the way homes are bought and sold (yes, even auctions). It’s called haggling or bargaining, and what that involves is a contest between seller and buyer. In many cases it’s unavoidable – and when it is, you might as well play the game as best you can.

Printed each week in The Weekly Review – Melbourne’s Million Plus property magazine

Week 4 August 27 2011: Not a lot happened at auction in this market this weekend at $3M+, with the exception of 25 Kent Avenue – the action was all last week and it was away from the auctions.

Biggest Sale: 25 Kent Ave, Brighton, Leigh Hallamore (Buxton); After auction, $6,400,000, 4 bidders
Crowd numbers were high to witness the auction of this rare absolute beachfront property.   Auctioneer Leigh Hallamore cleverly positioned himself along the back fence in front of the beach to maximise the emotional impact of the uninterrupted beach views of the (as it turned out) 4 bidders.  With at least three beachfront properties selling recently at $6m, $7m then resold for $8m and an undisclosed price, 25 Kent  was – as expected – strong.  An opening bid of $4m was a ‘dream price’.  A second bidder quickly upped the price to $5.9m and the bidding was on, stopping at $6.35m where the property was passed in to see if there was a bit more.  And there was: a final sale price of $6,400,000 or not too far off $10,000 per sqm if you saw no value in the home. (Kristen Hatt)

Marcus Chiminello of Marshall White: “We are currently seeing great activity in the upper end of  from both buyers and sellers emerging from the depths of winter and that are now prepared to participate in the market as opposed to the past weeks and months when many were prepared to just sit and watch the market. Most of the recent high end market sales have not been an overnight success, most requiring months of dialogue between agent, buyer & vendor. As demonstrated in recent weeks, I believe the trend of discreet off market transactions will continue to grow moving forward as vendors and purchasers alike at the higher end of the market seek privacy with their real estate transactions.”

$3M+ Market Summary: Activity in this $3M+ segment has been building most of this month of August but there has been little to show for it until this past week, which has been a stellar performance by any measure. Bidderman was over 2 on the $3M+ homes purchased.

Agents are reporting that buyers have started to change their attitudes – and for once we don’t think this is spin. The interest is at least partly because the market has been starved of interesting offerings like the property at 4 Mernda Rd, Kooyong (Ross Savas and Michael Armstrong), which was a beauty and had at least 3 bidders over $6million (and would possibly have had a few more if circumstances hadn’t pushed for an early finish to the Expressions of Interest campaign).

Last week’s powerhouse result for Paul Keane and Peter Batrouney at 9 Salisbury Balwyn, where 4 bidders produced another result over $6 million, indicates that some buyers have waited long enough and are saying: “OK if it’s good, it’s priced right and it meets my needs then I’m interested.” There was another one of these on Saturday over $6 million at 25 Kent Ave, Brighton (see full auction report below).

But before you think we’ve been sent a case of Moet by our new found friends on the other side – it’s all about the price and quality of specific properties.  The market is definitely not in an upward phase in terms of price. In fact unless your property is an A grader, and “correctly priced”, it’s likely the price is falling every day you ponder over the signed offer on the table (if you can get one). Smart sellers realise this.

Just to get some balance on what’s happening in terms of price:

• The Mont Albert property sold by Michael Ebeling that we report on below, was a good result. But it sold last year for basically the same price.
• The selling price of St Georges Road, Toorak property represented a greater than 10% discount on the initial asking price. It was a great result in that sub $9million range, but it had no takers for 6 months at $10million.

So what’s to account for this past week’s activity? Partly it’s because buyers can see less choice coming on the near future, due to the Grand Final being on later this year (thus preventing a normal 4 week auction campaign between Grand Final and Melbourne Cup). Partly it’s due to some good $3M+ homes on offer right now. And partly it’s due to underlying demand that has been there for some time. A lot though is because of correct price matching.

No doubt the next few months will see an increased number of stales (long term unsolds) – repackaged, rebadged and remarketed. If they are also repriced then who knows, maybe we will be off again and back to a more normal balanced market (which is what most buyers also want).

Of course, it could all  just be a dream and we will all wake up again soon.

There were some good Private Sales through the week and we saw a return to off market transactions, as well as two successful Expressions of Interest:

• Ross Savas and Michael Armstrong of Kay and Burton held a Boardroom Auction last Thursday for 4 Mernda Rd, Kooyong. (This had brought forward the original Expressions of Interest deadline for Tuesday of next week.) Its “on the market”  price was around $6,000,000, and it sold for between $6,000,000 and $6,500,000 with 3 bidders. See our ratings below.
• Michael Ebeling of RT Edgar got 12 Stanhope St, Mont Albert away for towards $3million – off market. This was around what it reportedly sold for last year. Not all bad news in that.
• Rob Vickers Willis and Tim Derham of Abercromby’s sold 10 William St, South Yarra under the hammer for over $5,000,000 at a Wednesday private auction. See our ratings and report below.
• Michael Cooney of Hodges sold 50 Ebden Ave, Black Rock (a two hatter with a 700+ rating) for over $3,400,000. This modern home was a goodie, but it’s been rare to see homes sold for more than $2 million in this area since 2009. So this was a good result and the best sale in Bayside we can report for the week.
• Expressions of Interest – 333 Glenferrie Rd, Malvern with Gerald Delany and Nicole Gleeson – sold for over $3,500,000.
• Post Last Week Auction Pass In 24 Hawthorn Grove, Hawthorn – Paul Keane – sold for an undisclosed amount above $3,000,000
• Off Market:4 Mathoura Rd, Toorak – Peter Bennison of Marshall White. This went to auction last year (or maybe earlier), and has now been traded for more than  $3,000,000
• Off Market:10 St Georges Rd, Toorak – Marcus Chiminello – This home has been through a few agents and while it did not achieve what we thought was an incredible asking price of $10,000,000 earlier in the year, it did actually get close to $9,000,000 in the last week or so – still an incredible price. See our home rating
• Off Market: 3 Murray St, Armadale also Marcus Chiminello. It also sold for just shy of $4,000,000 recently.

These sales represent the best or close to best numbers in this Top End $ segment this year.

Agent Survey: Why is this week’s $3M+ improved performance happening?

Paul Keane: With the stock-market on what appears a roller-coaster ride over the past month or so, people are retreating from it and investing that money in the good old “bricks and mortar”. I have spoken to several people over the past week and they believe the real estate market is off by about 10% from last year (some claim more) so if you are looking to upgrade your real estate portfolio there is so much upside….why not buy a $6m home that may have been worth $7m this time last year…..nothing much has really changed… only people’s mindsets are different.

Michael Armstrong: Some buyers are no longer getting burnt by the share market (they’re out). Some buyers have got sick of waiting. Some buyer attitudes have changed.  (Second tier homes though are continuing to drop in price.)

Mike Gibson: Definitely gained some traction in the last few weeks

9 Salisbury St, Balwyn - Peter Batrouney and Paul Keane. Competition by 4 bidders resulted in a very strong price under the hammer of $6,620,000

And now for a brief excursion back through the market of August 2011.

Week Three August 20, 2011: Whilst there was little, actually no doubt that prices were dropping across the general market and the $3M+ segment was well down on activity compared to this time last year there continued to be a tantalizing number of goings on to let those involved at this level think we may just be having something to do come Spring. Furthermore whilst we had been saying that activity off market was more talk than substance in the last week or so we were involved in and had seen a couple of deals that again confirmed that if the stock was actually for sale (meaning at market buy price not a seller dream price) then a deal could be done – as long as the buying  and selling agent were reasonable at their job and both the vendor and buyer had some patience. Boughts and solds this week

At Auction:

• 9 Salisbury St, Balwyn – Peter Batrouney and Paul Keane. 4 bidders resulting in a very strong price under the hammer of $6,620,000 ( See our auction report)
• 30 Mangarra Canterbury – James Tostevin. 4 bidders and a strong $3,210,000 under the hammer
• 24 Hawthorn Grove Hawthorn – Paul Keane – Post Auction for an undisclosed amount above $3,000,000

Kew, 49 Sackville St - James Tostevin - 4 bidders - Under the hammer $4,310,000

Week Two August 13, 2011: There was life at the Top End (even if the heartbeat was faint) as evidenced by some good Top End $3M+ results.

• South Yarra 83 Walsh – Justin Long and Peter Bennison – Bought After $4,842,950 – $5,327,750
• Kew 49 Sackville – James Tostevin – Under the hammer – 4 bidders – $4,310,000
• Camberwell 87 Broadway – Richard Winneke – Bought After – 1 bidder – $3,795,250
• Hawthorn 4 Glan Avon – James Tostevin – Under the hammer – 3 bidders – $2,815,000
• While mid week 8 Myoora Toorak (Over $10,000,000) did not sell at a Thursday auction (it’s a home that requires a very specific buyer and could be hard to sell even in a stronger market) -  8 Blackfriars Close Toorak (Justin Long) our biggest pass-in last week-end at $3,000,000 (0 bidders) did sell for $3,250,000 on Monday.
• Peninsula – in one of “the” streets – Spindrift in Flinders – we saw Marketnews favourite and nice lady Prue McLaughlin of Kay and Burton sell a home for an undisclosed amount well over $4,500,000. As well Andrew Hines got 57 Tubbarubba Merricks North (over 60 acres) away for around $3,500,000
• 19 Lovell St Hawthorn East -Modern home saw the Expressions of Interest campaign brought forward by Sam Wilkinson and Scott Patterson and a sold sticker in the mid $3m’s

Not quite $3m - which is the story of the $3M+ Market this 2011 winter - 18 Knutsford St, Balwyn, Richard Earle, Bought After for $2,730,000 on a vendor pass-in of $2,300,000.

Week One August 6, 2011: We had a few comments that we hadn’t put up a $3M+ market report since May. That was for a good reason – it would have been an almost blank sheet. However there were some sputters  of life from deep within – a sign that the top end engine could be starting to turn over again. From our own company’s point of view we were involved in 3 dealings after having been bereft of activity for most of winter at this level.

• A sale in Boroondara this last month at just over $6M – completely off market
• 24 Boxshall St, Brighton (David Hart), which has been on the market for a long time, has finally changed hands for just under $3M
• 4 Sussex St Brighton (Regina Schmidt and Brian Devlin) sold for a hard-to-believe $3,775,000. We attended that auction and the result was … well brilliant.
• and while down in Bayside, 2 Tennyson St, Brighton with Jonathan Dixon, after passing in at auction a month or so ago, just sold for around that pass-in figure and well over $3,000,000
• 12a Harrison Crescent, Hawthorn, which had a rating too low to put up on our site, was sold by Sam Wilkinson of Kay and Burton for over $3,000,000
• Along with 3 Irymple Ave, Glen Iris (Iain Carmichael); 5 Story St, Parkville (Tom Roberts) and 80 South Road, Brighton (Barb Gregory) in the last week, the Top End over $3M is trying to work its way back into some form.

Back to the Future – What’s up Ahead?

With a couple of big homes due for auction next weekend – including 49 Sackville St, Kew (James Tostevin); 7 Foote St, Brighton (Phillip French of RT Edgar) and 83 Walsh St, South Yarra (Peter Bennison and Justin Long)  - we will begin to see if there is some air at the higher altitudes as we limp into the footy finals – traditionally a key indicator for activity in the early and late Spring markets at the $3M+ level.

Last week we covered the Early Spring Market

There’s no guarantee we’ll see a lift in the housing market as we go into Spring this year. On the supply side, there’s a build-up of long term unsold properties (stales) and a compounding shortage of exciting, well priced new stock. On the demand side, buyers have had a particularly hard time of late – not so much in finding homes, but in finding homes of quality; however when those homes are found they sell well, proving there is a solid level of underlying demand.

Buyers do want to buy and they’ve been out there in good numbers most weekends. Our demand indicator Bidderman, has shown an average of two bidders an auction some weekends. But they have proven to be stubborn on homes that are not market priced.

There are actually two Spring markets: early Spring (September and October) and late Spring (November). They’re intimately connected. According to Sam Gamon of Chisholm and Gamon, what happens in late spring is always greatly influenced by the early Spring results. It’s all about confidence says his Elwood auction partner, Torsten Kasper. “A few weeks of good results in early spring may lay the platform for an increased level of homes for mid to late spring.”

On the other hand, David Hart of Buxton Brighton says there’s a strong pattern favouring a late spring recovery – at least in Bayside. “Human nature being what it is, many people wait until they are almost out of time to put their property on the market. And there are those who purchase October onwards, who need to sell their own property prior to Christmas. I expect this year will be no different.”

So what about price?

Despite the continued negativity from overseas, Buxton’s Mark Earle can’t envisage any significant changes in housing prices. “Fundamentally there is a shortage of houses in Melbourne with population growth. And Melbourne has been widely recognised as the best performing city in the country in terms of stability over recent years.” Cycles seem to be getting shorter, he points out – “take the 2008 financial crisis and the subsequent boom market of 2009” – and things can change quickly.

According to Benmac’s Iain Carmichael, given the low stock levels, prices are likely to hold. “Agents will have far less trouble achieving full results for good family homes in the $2,000,000 – $3,000,000 range. Vendors at the very top end have a tendency to feel that their property is somehow guaranteed to appreciate in the face of a steadying market. Curious really!”

Kay and Burton director Ross Savas also believes that prices will be steady. “The fundamentals of our economy are still very good and we have amazing employment levels in our country. So as long as nothing occurs out of left field I believe prices will hold in Victoria.”

So when do you buy and sell?

Peter Kennett of Hocking Stuart, says his advice to sellers is to get in early rather than late. “Late spring is when supply usually increases with more motivated sellers as they have most likely bought!!” As for buyers, David Hart, of Buxton Brighton, believes that the later in the year before Christmas, the more motivated sellers are to lock in a result. “Although you should never pass up the opportunity to purchase the right property on the assumption that if you wait, you might get an early Christmas present!”

With the mix of school holidays, horse racing weekends and the shift in the Grand Final from the last week in September to the first week in October, there are effectively only 16 Saturdays that will give a vendor the traditional four Saturday auction program,  points out Richard Winneke, of Jellis Craig. “And of these no doubt some will be more popular than others – creating super Saturdays on dates like 27th August , 24th September and 3rd December.”

For bargain hunters, late spring may be a better market than early due to vendors having to sell and time running out. However you do take the risk that what you may not be there by late Spring.

This is where patience presents a conundrum for buyers: if many of us pass on buying in early spring then the late spring surge may not happen at all. And come Christmas time we will still be in a buyers’ market but we won’t have bought. The question is then: how long are you prepared to wait?

Printed each week in The Weekly Review – Melbourne’s Million Plus property magazine

Welcome to the new world. Well, not so new – it arrives every winter in Melbourne when the favourite weekend sport that is the public auction quietens down and a version of the Melbourne Club opens for the $M+ homebuying business. For four months between a certain royal’s birthday and a hoped-for Collingwood victory on Grand Final Day, auctions diminish as the favoured way to do business at the Top End – and private sales, off markets and expressions of interest take over.

For unwary buyers, private sales can present some issues. In fact a number of potential buyers start out on the back foot with private sale negotiations simply because they think they are easier than auction bidding.

We are not sure why anyone would think private sales are necessarily easier to negotiate than auctions. Sure, some private sales are straightforward enough: it’s simply a matter of paying the asking price. But it’s worth realising that private sales have no rules like the ones they have to read out at the start of an auction. There is no start and stop time and no bells to say the property is: ‘On the market’. For casual buyers there is no public confirmation of the right price level in the form of other bidders as in an auction.

As well, over the last few years the curious practice of not stating a price has crept in on some private sales. So when you ask a salesman the price, the response can vary from: “Make us an offer” to “Buyer interest is at $3,000,000 and the vendor wants around $3,350,000 (we think)” to “Price range, sir, is between $1,800,000 and $1,920,000”.

Even the inexperienced buyer should be able to see the dangers in being asked to “Make us an offer” – especially if they want to buy the home. There are solutions for a buyer involved in this process, but hand on heart you as a buyer would be best served by getting professional representation in this instance.

In the case of the other two price types which are a version of the range, it’s just as confusing. Could you buy the property simply by paying the Top End of the range? That depends on the process and on which agent you’re dealing with.

Which leads us to the second traffic stopper in private sale negotiations: process. Even if you offer top dollar, your offer may still be referred to others and that involves a 24 hour feedback process during which time you may be asked if you have any more (even if there is no other offer). Or you could be asked to participate in a Boardroom auction, which involves a new set of rules. Or you could simply be told nothing – which could mean it is sold to someone else, maybe because as a negotiation tactic your offer had a clause stating this was your final offer and they believed you and didn’t refer back to you.

Even if your offer of the top price in the range is accepted on the spot, you may wonder whether you did the right thing?

Each and every agency you deal with has a different private sale process and in fact a number of agents within the different agencies use different private sale practices.

Which brings us to the final issue of agents – who do you actually speak to? In some companies you could be involved with a number of agents during the buying process – but only two of them can actually help you. In private sales in Melbourne’s Top End it is a club, it works well for buyers and sellers and a lot of real estate is exchanged, however you need to know who’s who within the club if you want to get the result you want.

When you go to your next open for inspection, for instance, does that well dressed agent you spoke to actually know what is going on? Are they the listing agent, who has the ear and trust of the vendor – or are they someone so far removed from the process that you probably know more about the home and what it takes to buy it?

So welcome Melbourne, welcome to the winter of wonderment and the intensely interesting Private Sale process.

Printed each week in The Weekly Review – Melbourne’s Million Dollar Plus Magazine

“No way mate - this market is fighting back– taking no prisoners today (April 9th).” John Bongiorno. Malvern 54 Stanhope. Bought $3,170,000. 3 bidders.

Week Ending 30th April: Back from a week or two off, this market now, has a fairly clear run till Christmas, with a only brief breaks for a couple of holiday weekends.

Over the next four to six weeks we should see more choice and some reasonable activity (although not expected anywhere near the levels of last year), as the May market is a traditional agent preferred selling time. Why? Well there is a good stretch of time until Queens Birthday weekend to run an uninterrupted campaign. Stock Quality is the unknown.

Come July things will be relatively quiet as there is a general sellers’ feeling (rightly or wrongly) that good homes do not look their best at this time of the year and accordingly a number of high end selling agents take winter holidays in Europe and therefore do not program campaigns to be run in their absence.

In the post Easter week or so there have been ten or more high end sales including the representative  half dozen below

• 15 St Ninians in Brighton for between $8m and $9m – perhaps not a lot more than what is was sold for less than 2 years ago (need to look up sale time to be absolutely sure of date) – Justin Follett of Kay and Burton
• 255 New Brighton for between $5.5m and $6m – Regina Schmidt and Brian Devlin of Buxton
• 50 Hotham St East Melbourne which had been on the market for at least 6 months for $7million – Paul Richards of Hocking Stuart – on the market for a fair bit of last year and also a failed auction. Nonetheless a reasonable price – not everything the sellers wanted – but more than had been offered at times in the past by buyers. A good result for both parties.
• 150 Clarendon East Melbourne – the Salta apartments saw Anton Wongtrakun deliver another big sale at $5,200,000 for Unit No 4
• Out to the paddocks of Lower Plenty with a Marketnews favourite Rocco Montanaro of Morrison Kleemand who achieved close to $3m on an Expressions of Interest Campaign for a good home on 7 acres at 75 Cleveland.
• And we round up our selection of high end Easter Sales with a $6M+ sale at Mount Eliza 15 Freemans Road – Michelle Skoglund of Aqua

In summary over Easter the market at this level has not been dead, but definitely subdued – there is increasingly a dampening mood in terms of both buyer and seller confidence. Time will tell if this is a short or longer term phenomenon. Price will play a important part going forward as we seemingly move into more uncertain market conditions – i.e. ones that are not as clear as they have been in the past 2 years since we awoke from the GFC. Overall the market now and in fact all of 2011 has not been strong at the $3m+ level – but there are still enough transactions (especially in Bayside) of sufficient value to avoid holding a wake just yet.

With winter approaching and a fair amount of stock available we think it is a buyers’ market and the future is best described as – “uncertain times”.

Finishing on a positive note our James Investment Division has seen some solid interest with investors coming back into the market (rentals are improving) and one current flavor of the times is blocks of flats. Some examples of what we are talking about.

Finishing on a positive note our Investment Division has seen some solid interest with investors coming back into the market (improving rentals as well) and one current flavor of the times is blocks of flats. Some examples of what we are talking about.

Week Ending 16th April:The $3m action this week was away from auctions.

The drought in the Balwyn Formula – big price, small land, new home – was broken again with Maurice Di Marzio getting 59 Hosken Street, Balwyn North away in the high $3 millions. That’s the third in a week on the back of the two biggies reported last weekend.

Canterbury, 11 Chaucer Close, with Boroondara doyen Peter Mitchell of Marshall White, got the same sort of high $3 millions price.

Hawthorn, Harcourt St, was a hot place to be this week with Nick Ptak getting 79a away for just under $3.4 million (we think) and one of the results of recent times. Peter Vigano of Jellis Craig  got $3.625 million for 42 (we did not see that price coming)

Speaking of good results, Marcus Chiminello got a price in the high $3 millions for 2/264 Walsh St, South Yarra. It’s not our job to talk agents up but in a slow apartment market Marcus has got a number of solid results.

St Kilda West, 10 Loch St, with John Holdsworth sold for $3,650,000.

Andrew McMillan from Benmac got 367 Beaconsfield St, Kilda West away in the $4m to $5m range after a very lengthy campaign (probably due to previous asking prices).

At Auction today 68 Hopetoun Rd,  Toorak with Jellis Craig’s Steve Abbott, sold afterwards for $3.05 million. That was up a few hundred thousand dollars on the last time it sold around a year ago.

Week Ending 9th April: The strongest week this year for the $3m+ Top End market:

South Yarra 43 Marne St: Nicole Gleeson of Kay and Burton: Well over the $12,000,000 quote range making Domain Precinct land values at $8,000 per sqm for the bigger blocks.

Hawthorn 51 Berkeley St with Tim Blackett also of Kay and Burton: North of $7,000,000 on Scotch Hill for a good home that needs some reworking and a tennis court.

While still in Hawthorn Mr Nice Guy and Very Effective Tim Picken of Jellis Craig got away the quinella with 25 Mary St (Modern in Grace Park) being bought for a credible $4,300,000 and 1 Hilda (period in Grace Park) for $2,800,000. Both a little down on ambitious asks but nonetheless solid prices for what they were.

But wait there’s more and was it us who cried out the death of the Balwyn formula- new build, small block, overpriced. Well on a technicality were are still credible as it’s neighbouring Kew; but with 21 Macartney (Walter Dodich of Marshall White) and 5 Mawson (Peter Dixon of Jellis Craig) both selling at auction today for $4 million’ish, the death of this market maybe a little exaggerated. However please it is only two sales, but they were biggies.

The news doesn’t stop for sellers there with period home successes at 50 Wattle Valley Canterbury (Duane Wolowiec and James Tostevin) selling under the hammer for a strong $3,465,000; 54 Stanhope Malvern with Rae Tomlinson also under the hammer for $3,170,000 and 13 Rubens Grove Canterbury with Fletcher’s Jeremy Desmier bought before for over $3,000,000.

Bayside has recorded a few strong sales as well with 29 Bay Street Brighton (Bert Stewart of Buxton) selling post auction over $3,550,000 and the final result put north facing (no view) Golden Mile land over $3,200 per sq metre. That is a steady as she goes price similar to last year Golden mile (no view) buys. And another $3m+ sale with a strange twist (all non bidders asked to leave) at 40 Drake Brighton (Ian Jackson).

While on land sales 1073 Malvern Road Toorak (Justin Long) passed in at $3,225,000 and a reserve was offered – not taken up – two new bidders appeared and a second auction took place resulting in a sale well over the pass in figure.

Why all this activity? Pass-ins are still languishing in large numbers without much interest. However its all about quality and new stock and buyer confidence. All three things happened this week -

1. buyers felt better in themselves (confidence);
2. buyers felt this week had some real quality offerings (quality)
3. and buyers couldn’t see a lot of stock coming one (limited new stock)

Post Easter is no Buyer lay down misere after today’s results.

Like many auctions this weekend, a lot of standing around, not doing much. MALVERN EAST, 9 Lewes Drive: Passed-in at $2,500,000 with two bidders. Anthony Grimwade (RT Edgar)

At 6pm on Saturday the James Clearance rate for $M+ was 57% on the 30 auctions we attended. That was well down on last week’s cameo of excitement, but understandable giving the quality change between this week and last week at the Top End.

Bidderman, our demand indicator, was 1.5 bidders per auction. However the quality of the offerings was one of the lowest this year.

While there were a few volcanoes (4 or more bidders), what was more interesting was that 1 in 3 homes were ducks meaning they didn’t get a bid a all. We think that was a confirmation of the market reaction to this weekend’s lack of Top End quality.

In fact, only 1 in 5 of $M+ homes monitored this weekend sold under the hammer.  The rest sold before or soon after – or didn’t sell at all. That’s an Under the Hammer Clearance Rate of 20%.

What that means is that in this current market buyers need a lot more than just a ‘hand up in the air and hope’ strategy to buy homes well.

Market Summary:

There were plenty of auctions at the lower levels, e.g. at or around a million dollars, but many lacked any WOW factor.

A number of the key selling agents were off this weekend on holidays and, as with many buyers, they seem to have turned their attention to pursuits other than buying and selling.

It was hard to find a property over $2 million up for auction. The only $3 million plus auction we saw in Toorak was at 68 Hopetoun Road with Steve Abbott of Jellis Craig – an art deco that seems to get sold every 12 months (see report below).

The REIV median prices came out this week and rightly confirmed what the market has been saying for some time: Prices are weaker.

This year to date has been a positive one for buyers with reduced competition, more choice and lower prices. On the flip side the buying opportunities are only such if you take them (a Steve Abbott auction line).

Next week, there are almost no auctions and not too much the week after.

Post Easter, as we said last week, may or may not be a different story. But our feeling is that quality choice will dry up and the big issue will become finding a rose amongst the thorns, the pass-ins and the stales. If those roses are hard to find then prices for them will firm as new quality drops with discretionary vendors adopting a wait and see strategy.

What Sold Well – Volcanoes with 4 or more bidders

• Albert Park, 62 Barrett St – Peter Simmons – Nicely renovated Period Home – $1,575,000
• Hawthorn, 23 Falmouth St – Hamish Tostevin – Nicely renovated Period Home – $1,330,000
• Hawthorn, 11 College St – Richard Earle – Nicely renovated Period Home – $1,409,000
• Kew, 36 Maitland Ave – David Oster – Land site – $1,345,000
• Toorak, 80 Grange Rd – Rodney Morley – Nicely renovated Period Town Residence – $1,500,000

$3M+ market: Overall, the high end at $3 million+ appears as weak as it has been for 12 months. Although  a shortage of new quality stock post Easter has put some zing back into the market as some buyers are forced to act.  Growing kids, divorce, lifestyle, whatever cannot wait for everyone indefinitely. Go to our $3m+ report to see most of the last weeks’ 10+ sales.

Michael Armstrong, Kay & Burton, South Yarra: “I think we can expect a fairly normal market post Easter.  Market conditions are settled and stock levels looking forward to May/June are lighter than what we’ve experienced in the past couple of months.  Vendors have had to adjust their expectations in recent times and buyers with long term views have realised that the past few weeks have presented them with good opportunities. The better quality offerings will continue to attract competition and alternatively  buyers will continue to deal harshly with those vendors (and agents) who price properties incorrectly.”

ST KILDA, 2 Marine Pde: On a bit of a rollercoaster day, it was apt to have the Scenic Railway at Luna Park as the backdrop of this Claudio Perruzza (Biggin Scott) auction. Passed in, $1,850,000, no bidders

Biggest Sale we covered: 68 Hopetoun Rd, Toorak, Steve Abbott (Jellis Craig); after auction, $3,050,000, 3 bidders
“This art deco property with Heritage One (HO1) overlay was looking for a committed buyer to make it a home. A vendor bid of $2,800,000 got the proceedings underway and the first bidder entered the race with a bid of $2,850,000. A second vendor bid of $2,900,000 signalled that the bidding was still some way off from the desired sale price. Auctioneer Steven Abbott wouldn’t entertain an increment of $5,000, demanding at least $10,000 to stay in the race. Despite keen bidding, this property was passed in at $3,020,000 but this was just the start of the negotiations. Bought after for $3,050,000.” (Debbie McTaggart)

Biggest Pass In we covered: 12 Dudley Pde, Canterbury, Doug McLauchlan (Marshall White); passed in $2,000,000, no bidders
“Doug McLauchlan took centre stage in the very big, leafy backyard of this great property and looked ready for action. Assisted by his Marshall White team, Mr McLauchlan explained that the circa 1923 home had been in the same family for a massive 72 years. But even the sentimentalists amongst us in the crowd weren’t ready to put their hands in the air and bid. Mr McLauchlan opened and closed on a vendor bid of $2,000,000.” (Jen Milligan)

Auction Video: Architect Adam heads to sunny Hawthorn this week to witness a ripper auction at 23 Falmouth St, a Marshall White property with auctioneer Hamish Tostevin.  Click on the live action.

Big Issue and Weekend Reflections: Coming back after the Easter holidays.

Two Weeks Off: Marketnews will be on holiday for two weeks with our next Marketnews on the 7th of May. A number of agents are talking up the 21st and 28th of May as possible Super Saturdays (as buyers let’s hope so). For James Buyer Advocates it will be business as usual.

We Only Buy Homes and have a safe Easter break:

Job Advertisement:

“Oh Yeah Sure Buddy - you are joking, aren't you?” Sold for an undisclosed amount, $500,000 over reserve. 4 bidders. Ivanhoe East 32 Warncliffe. David Oster.

At 6pm on Saturday the James Clearance rate for $M+ was 71% on the 34 auctions we attended. WOW – 71%, a big change from last month.

Bidderman, our demand indicator of bidders per auction, was at 1.8. So on our biggest $M+ auction weekend so far this year, when you would expect buyers to thin out and Bidderman to drop, it actually went up on the trend of the last few weeks.

It may be just one day but it was strong out there this weekend. For the first time since late February our advocates reported feeling feeling genuine price pressures whilst bidding.

Market Summary: The big question is whether this is a statistical blip or whether we are a seeing the trend return towards a balanced market. If so, why?

1. Buyers feel a little better than they did last month and confidence came back into the market as a result. Our enquiry rates are certainly up.
2. The overall quality of homes on offer was up on previous weeks and they were plentiful in number. We saw lots of 700+ James Home Rating (quality) homes go to auction this weekend.
3. Last week as buyers looked into the future they saw that the cupboard of  post Easter offerings was bare – and so they adjusted their game plan accordingly.

Whether this is a blip or a trend change will largely be determined by what discretionary sellers do in May. If they are encouraged by this weekend’s results to put their properties onto the market, then prices may stay softer than last year. If those sellers stay out and demand continues as is, then the overhang of stales will begin to be mopped up and the good buying conditions of the last months (price and choice) will dissipate.

This weekend, again, we saw the overall power of the Melbourne market and the power of demand and supply. There is an underlying strength in Melbourne homebuying (based in immigration and lack of homes), that has slackened off in recent times as buyers become more circumspect with concerns about overseas events, jobs, and who knows what exactly. As well there has been plenty of choice. BUT as soon as there is a hint of a quality stock shortage the market responds, particularly with regards to well-located quality family homes, on land and of a period flavour. And it responds strongly.

More insights

• It wasn’t just the consistent $1m to $1.5m range holding up its end in isolation, this was also the strongest single week this year for $3m+ buys.
• It was the second strongest clearance rate of the year, despite an almost Super Saturday (140 $M+ Auctions – Inner East and Bayside)
• We saw consistent bidding across the board, with over 75% of monitored auctions having at least one bidder.
• The big question going forward after our Easter market break is whether nervous sellers will re-enter the market on one week’s good showing.
• Prices are generally down on this time last year (there are exceptions), so good homes are attractive right now. And while new choice may become limited,  some existing choice (overhang) still remains.
• Top End rentals are getting considerably more rent than expected as supply in relation to demand is tightening. This observation from two agents needs more examination at a later date. We’re interested in how widespread this may be, why it is happening and what effects it may have on the buying market. (Are borderline investors perhaps re-entering the Top End?).

Wild and Wooly - the weather that is, not Rob Vickers-Willis. Toorak 3 Denham. Passed In $2,010,000. 2 bidders.

The $3m+ Market’s strongest 2011 week so far (some examples):

South Yarra 43 Marne St: Nicole Gleeson of Kay and Burton: Bought well over the $12,000,000 quote range, putting Domain Precinct land values at $8,000 per sqm for the bigger blocks.

Hawthorn 51 Berkeley St with Tim Blackett also of Kay and Burton: Over $7,000,000 on Scotch Hill for a good home with tennis court that needs some floor plan reworking.

While still in Hawthorn, Mr Nice Guy and the Very Effective Tim Picken of Jellis Craig got away the quinella with 25 Mary St (modern home in Grace Park) being bought for a credible $4,300,000 and 1 Hilda (period home in Grace Park) for $2,800,000. Both prices were a little down on ambitious asks but they were nonetheless solid prices for what they were.

Kew – Was it us who cried out the death of the Balwyn formula – i.e. new build, small block and overpriced? Well technically we are still credible, because these were in neighbouring Kew: with 21 Macartney (Walter Dodich of Marshall White) and 5 Mawson (Peter Dixon of Jellis Craig) both selling at auction today for $4 million-ish, the death of this market may be a little exaggerated. It was only two sales, but they were biggies.

Malvern and Canterbury -  50 Wattle Valley, Canterbury (Duane Wolowiec and James Tostevin) sold under the hammer for a strong $3,465,000; 54 Stanhope Malvern with Rae Tomlinson also under the hammer for $3,170,000 and 13 Rubens Grove Canterbury with Fletcher’s Jeremy Desmier bought before for over $3,000,000.

Bayside has recorded a few $3M+ sales as well, with 29 Bay Street, Brighton (Bert Stewart of Buxton) selling post auction over $3,550,000. The final result put north-facing Golden Mile land (no view) at more than $3,200 per sq metre. That is a “steady as she goes price” similar to last year’s Golden mile (no view) buys. Another $3m+ sale with a strange twist (all non bidders asked to leave auction) was at 40 Drake Brighton (Ian Jackson of Kay and Burton).

Toorak While on land sales, 1073 Malvern Road (Justin Long) passed in at $3,225,000 and a reserve was offered which was not taken up by the pass-in bidder. Two new bidders appeared and a second auction took place resulting in a sale well over the pass-in figure.

For full details each week of what is happening in the Top End $M+ market see our regular $3-Million-Plus Market Reports.

Round the Grounds – Price this year v last year and a word on Post Easter stock levels.

Malvern John Bongiorno, Marshall White: “Price is a little softer on certain homes but on high quality homes they are still rocking, granted buyers are more discerning. Stock levels are not as strong as last year. Rentals at the top end are exploding in the middle and top end market. Big news is rents have increased, possibly making investments more attractive at the higher end. There is such a shortage of homes to rent.”

Caulfield Rodney Morley, Woodards: “I think the negativity means less stock is coming on in May and Winter. Everybody wants records that are not coming at the moment. The market is definitely softer than this time last year in price. Buyers (then) were buying anything. Right now, buyers do not feel that urgency. No question that the market is softer.”

Brighton Bert Stewart, Buxton: “I think the market is around 10% down on some top end homes. Stock levels and therefore buyer choice after Easter are not looking good.”

Camberwell Geoff Hall, Noel Jones: ”Prices are down around 10% on this time last year, with some exceptions for quality homes, and stock post Easter is just not coming on like it did last year.”

Hawthorn Richard Winneke, Jellis Craig: “Big drop in new buyer enquiry this week. Probably due to the holiday factor but it was a noticeable drop. Rentals are definitely getting more than I expected price-wise and this may stimulate investment into Top End homes. East of Burke Road (Camberwell and Canterbury) has not performed as well as Hawthorn and Kew this year to date. I think prices are still relatively solid around that early million dollar mark but softer higher up.”

Carlton Tom Roberts, Nelson Alexander:  ”Stock levels Post Easter are tightening with only the sellers that need to sell going to market. Good homes still going exceptionally well but those results are in amongst the not so good going not quiet so well as last year. Prices are down a smidgen.”

Playing for Keeps here. Big 150 plus crowd. 29 McKinnon, Carlton. 3 bidders. Bought for a whopping $1,417,000 (462 sqm). We thought it was justified, but it was still big. Nick Renna, Peter Sinclair and Melissa Ryan of Hocking Stuart

Biggest Sale we covered: 21 Macartney Ave, Kew; Walter Dodich (Marshall White): After auction, undisclosed around $4,000,000
“Being in the coveted Sackville area this auction attracted a large crowd of about 100. The crowd were well spread out and even blocked the road in front of the property as they heard auctioneer Walter Dodich open proceedings. The auction began in Mr Dodich’s own words with a ‘traditional’ vendor bid at $3,700,000 as no one was willing to start things off. However this was the trigger that allowed two bidders to start the battle off for the property. Initially there were meant to be three bidders however the third bidder couldn’t get his bid in as he always cut off by the other two. When he finally got one in there was applause from the crowd and a cry of joy from the bidder. As the auction went on, the climax built and the crowd held their breath as the price rose and rose yet there was still no indication from Mr Dodich about whether the property was on the market or not. At $4,000,000 Mr Dodich passed the property in and after lengthy negotiations the property was bought after for an undisclosed amount.” (Josh Bong)

Biggest Pass in we covered: 72 Kerferd St, Malvern East, John Bongiorno (Marshall White); Passed in, $2,800,000, no bidders
“With 300 people having viewed this property and 100 or so crowded into the garden of this Gascoigne Estate home, auctioneer John Bongiorno was confident of a sale. But it was not to be with a vendor bid of $2,800,000 the only one of the day and the property passed in. However, with one interested party heading inside, it may not be long before this stunning property is sporting a ‘sold’ sign.” (Debbie McTaggart)

The Big Issue: Architect Adam and Klarity Kris discuss whether they believe buying conditions will be as good post-Easter as they are now.

Auction Video: This week Jen Milligan, our Market News Co-ordinator, fills in for our advocates who were busy with other auction commitments. 15 Epping St, Malvern East, a BenMac auction with Iain Carmichael. Click on the live action auction video.

Buyer Masterclass: Conditions are great for homebuyers – so where are they?

We Only Buy Homes

New Subscriber System: Over the next few weeks we will  introduce a free subscription model giving you greater access to our council-specific wraps, which include auction results, news, opinion and analysis on a micro level. This subscription model helps us improve your browsing experience as clients or general subscribers by delivering more relevant content to you on the site and in your email newsletter. Sign up by clicking Subscribe at the top right of the website. If you experience any problems as we are testing and implementing this new improved system please let us know at enquiry@james.net.au

ST KILDA WEST, 51 Park St: The ever dapper Geoff Cayzer (Cayzer) searches for bidders but passes the property in on a vendor bid of $1,225,000

Agent Q & A : How does current pricing compare with the same time last year?

Nick Yannopoulos, RT Edgar, Albert Park: “The intensity at auctions and buyer enquiry has certainly dropped over the last year particularly in the top end of the market. However outstanding homes in premier locations are still going strong as it does in any market. With winter approaching and stock levels reducing this should bring some stability.”

ST KILDA, 56 Blessington St: Adam Guest (Century 21 Wilson Pride) has his back against the wall (or tree in this instance!). Passed in $1,950,000, no bidders

SANDRINGHAM, 12 Georgiana St: Concern is written all over Julian Augustini's (Hodges) face. Passed in $1,675,000, no bidders.

Key Points:

• Brighton is like Stonnington at the moment, if it’s good its selling. The market has eased, but unlike last year a number of vendors have responded. However nobody says things are moving upwards yet. What are stock levels going to be like Post Easter – will the significant overhang be taken up, removing oversupply, especially at the Top End? Let’s wait and see. I think Peter Kennett’s comment below is the best of the week.
• Over $2m seems a road to far for many at present as 10 of the Brighton dozen were under $2m and the other 2 were under $2.2m.
• Price check on small land – Were St Precinct. 36 Lynch St (Mark Healey Buxton) was bought  for $1,220,000 privately which equates to $2,687 per sqm.
  

Agent Q & A: Is it a buyer’s market and, if yes, what are the best opportunities for buyers?

Peter Kennett, Hocking Stuart, Brighton: “Yes.  Great opportunities (and) fair choice but the window won’t last long… (with) school holidays and winter coming means less stock available for buyers… (Therefore currently there is) the most stock available for buyers. The best opportunities for buyers are at the top end.  There are great negotiation opportunities at the top end.”

Julian Augustini, Hodges, Brighton: “No.  It is a fair market for both buyer and seller…. It is a neutral marker for both sides…. Current success rate for Bayside is 70% and most are selling and those that are passed in are selling within a reasonable time period.”

New Subscriber System: Over the next few weeks we will  introduce a free subscription model giving you greater access to our council-specific wraps, which include auction results, news, opinion and analysis on a micro level. This subscription model helps us improve your browsing experience as clients or general subscribers by delivering more relevant content to you on the site and in your email newsletter. Sign up by clicking Subscribe at the top right of the website. If you experience any problems as we are testing and implementing this new improved system please let us know at enquiry@james.net.au

See it's not all bad news! ST KILDA, 30 Crimea St: A happy couple embracing. John Carter (Hocking Stuart), under the hammer $1,450,000. 4 bidders.

At 6pm on Saturday the James Clearance Rate for the 35 $M+ auctions we covered was an almost icy 51%. Bidderman, our demand indicator showing average numbers of bidders per auction, remained at a market-cooling 1.4 bidders per auction. We seem now to be firmly in the grip of a Winter chill.

Market Summary:

March 2011 has seen a $M+ auction clearance rate averaging in the high 50s.

As the market continues in its cooler mode, an overhang of unsold homes continues to build. Two-thirds of homes passed-in are still for sale. Add to this the Expressions of Interest campaigns ending in no result and there seems little doubt we are in a softer, cooler, lower market than a month ago – especially at the high end.

Last week we produced a special report on the fate of $M+ properties that had passed in at auction this year and found that only 3 of the 26 $M+ pass-ins we monitored had since been bought a fortnight later. Seven days on from that report only a further two of those pass-ins have been reported as bought. Some of these properties went to auction 3 weeks ago. Of the 13 properties that we monitored last week as having passed-in, four have since been bought.

It seems it’s a tough gig right now for sellers whose property passes in at a price over the market.

Buyers – this is opportunity! You may think it will get worse (or better depending on your point of view). But what is likely is that after Easter sellers simply won’t put their homes on the market, creating a shortage of stock choice resulting in firming prices. We are not economists but the bad news does not seem to be anything other than transient to us right now – especially when the media are carrying credible news stories on housing shortages (supply) and increasing internal and external immigration (demand)

The $1 million to $1.5 million market is different to the rest and is still rocking along. The best description we feel is not ‘cool’, but ‘balanced’ –  leaning in fact slightly to ‘warm’ for this dollar segment. This is the ‘hottest’ market at present and still has a reasonable depth of bidders. Prices are not shrinking as much in this price range.

The one thing that differs in this market segment from this time last year is the number of volcanoes (runaway 4+ bidder auctions). Today we saw 3 volcanoes from 19 auctions on properties between $1m and $2m we covered. This time last year (March 27^th 2010) there were  9 volcanoes from 14 such auctions. That is a volcano rate of 16% today compared with 64% this time last year in that $1m to $2m range. So, even the early $1m+ market has slowed.

Back to to the Overhang or Hangover:  If you accept we are in a Buyers’ market until Easter, then the question for those who haven’t gone into mental lockdown is:

What is happening to price?

That depends on the quality of homes you are looking at. If you just took your information from the results on sales of Red Hot Homes, you could interpret we are in an improving market. These top quality homes seem to be going even better than last year, as we show in the diagram below. (Although it is important to remember that these homes are understandably the focus of the selling agents – given they are marketers).

It is possible to read positive agent news, see some red hot results and look at selected median price changes and see a different story to what is happening to a lot of the market since the Labour Day weekend.

But for many homes where the vendors have circled $3 million as their hoped for price tag, the end result has been below rather than above $3 million.

In a slowing market with dropping prices as well as a fall in turnover (actual deals done), when the median price falls it does so in smaller doses than does the TOP of the TOP END market, because the TOP END tends to fall to the middle while the bulk of the lower end sales tend to hold up the median price. The reverse is not true when a rising price market comes with big turnover increases, because this tends to exaggerate the increases. This is not to say median prices are not useful – they are.

We are not saying the market is bad – we are saying it is good, in fact very good. You as buyers have opportunities to buy well – either by buying at a lower price or by securing a better home than you could have afforded this time last year, maybe even this time six weeks ago.

To buy better you need to be able to

1. Act not freeze.
2. Calculate correct market price ranges in this new market, i.e. when researching past prices it shouldn’t be an automatic plus 15% on last year.
3. Remain flexible if your targeted home is high quality. The market may view it as a red hot and these are still going well and selling occasionally for better prices than a year ago.
4. Adopt strategies to lower the price, or if that is too difficult for you then look for the buys that present opportunities to sell at a lower price without you asking. An alternative is to get a professional who can assist you in price strategies or take advantage of the opportunity to buy a better quality home than you thought possible.

Lower prices and choice can’t be a bad thing for buyers – even if only temporary.

If now is good news for buyers, how will the post Easter market be?

The important issue is stock supply, and to give us an idea of how this is going here are some thoughts  gleaned from our ‘Round the Grounds agent opinion about upcoming stock levels:

• There is not a lot of new stock on offer in Port Phillip due to Grand Prix interruptions. With Easter approaching it is lean times for new offerings.

• Stock in Stonnington is now starting to dry up as Easter interrupts the market. With the vibe dropping since Labour Day we may well see limited stock in the discretionary upper end market coming on post Easter.  19 Huntingfield Toorak (Justin Long) was a classic example of a limited offering that captured the market’s attention. Even allowing for building value at $2,000,000 (and that is generous) that meant that land value with a north orientation was  around $5,000 per sq metre – not exactly a giveaway price, and certainly higher than 2010.

• Peter Kennett, Hocking Stuart, Brighton, believes the window of opportunities and fair choice in Bayside won’t last long. “Currently the best opportunities for buyers are at the top end.  There are great negotiation opportunities at the top end. (But) school holidays and winter coming means less stock available for buyers… “

• In Boroondara there has been tremendous change within the business of real estate. The May and Winter markets will all be determined by stock levels – the size of the overhang, how it’s mopped up and whether or not we will see nervous vendors putting their quality stock up for sale post Easter. For buyers, now may simply be a window and not a trend.

Runaway of the Year to date:
208 Drummond Street Carlton: James Keenan of Nelson Alexander: Terrace home, quality and around 255sqm.  This was quoted and on the market at around $1.5million and two bidders fought it out until, wait for it, around $2.5 million (undisclosed final price). WOW!

$3M+ Market:
STOP PRESS: March, while not huge in numbers, did finish the month with three solid mid-week $3M+ buys – including four bidders at $7 million or better at two auctions.

• Toorak Ottawa Avenue : Jeremy Fox of RT Edgar – quiet sale off market in the mid $8 millions
• Toorak 19 Huntingfield: Justin Long and Peter Bennison of Marshall White – mid-week auction, 3 bidders and on the market at $6,700,000. Bought under the hammer for $7,060,000.
• Canterbury 13 Rubens: Jeremy Desmier Fletchers and Tom Ryan, Sold before Auction: Over $3,000,000.

A sea of umbrellas and a solid result for Justin Long (Marshall White) SOUTH YARRA, 66 Hawksburn: Under the hammer, $2,440,000, 5 bidders

Biggest Sale: $7,060,000: Toorak 19 Huntingfield: Justin Long and Peter Bennison of Marshall White – Mid week auction, 3 bidders and on the market at $6,700,000. Bought under the hammer for $7,060,000. James Connell said afterwards that this market was not all bad news and he added Huntingfield proved that.

Bidderbuzz Auction: 66 Hawksburn Rd, South Yarra, Justin Long (Marshall White); under the hammer, $2,440,000, 5 bidders
“Despite the abysmal weather, a crowd of no less than 90 people attended this South Yarra auction. Auctioneer Justin Long did his best to entice an opening bid from the crowd, but to no avail, and instead decided to make a vendor bid of $1,800,000 to break the silence. Mr Long did not have to wait long for his first legitimate bid from the crowd, which came within moments of his vendor bid. Four other bids soon joined in the mix pushing the price past $2,000,000, then $2,100,000, and finally slowing at $2,400,000. Sensing the conclusion of the auction, Mr Long cannily attempted to extract one or two last bids from the interested parties. The home was eventually bought under hammer for $2,440,000 and applause were heard for the winning party.” (Daniel Ehrenreich)

Biggest Pass In we covered: 79a Harcourt St, Hawthorn East, Mark Dayman (Marshall White); passed in $3,300,000; no bidders
“No shoes were allowed in this property, which happens from time to time. What I wasn’t prepared for were the sixty pairs of shoes that made it difficult to access the front door! The attending crowd of over 130 surely gave auctioneer Mark Dayman some confidence that there might be a genuine buyer amongst the group.  With a succinct preamble it was now up to the crowd to play their part, however the silence led to a vendor bid of $3,300,000 . Still nothing and half time was called. After the quickest half time I have ever experienced, Mr Dayman didn’t mess around and the property was passed in.  Negotiations were commenced with interested parties.” (Guy Angwin)

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Auction Video: Klarity Kris reports from leafy Malvern on the Jeremy Fox (RT Edgar) auction at 4 Beamsley. Click on the live action.

Buyer Masterclass: What should you look for when buying a home when there are kids in the picture? Klarity Kris discusses this scenario in this week’s Buyer Masterclass.

We Only Buy Homes

Do you know where all the bidders have gone? Sorry Nathan no! GLEN IRIS, 1/292 Tooronga Rd passes for $975,000 in front of a small crowd.